Football Index Collapse: Lessons Learned

Jim Shannon Excerpts

Wednesday 24th April 2024 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Member for Blaydon (Liz Twist) on bringing the debate forward. She will recall leading a debate on a similar subject here a couple of years ago, and I was very fortunate and pleased to support her, just as I regularly support other Members in Westminster Hall, which is always a pleasure, by the way, because the issues are really important. The hon. Lady is right about this issue: it is important—it is important because some of my constituents have found themselves in this terrible malaise, having lost money, so it is good to return to it.

If the Minister does not mind me saying, I am very pleased to see him in his place, as he always tries to answer constructively the questions and queries we pose to him. I was remarking to him earlier that he performed really well in the debate on the Football Governance Bill last night in the main Chamber, where his final comment referenced, “They think it’s all over! It is now!” I am old enough to remember that saying in 1966. I know that the shadow Minister, the hon. Member for Barnsley East (Stephanie Peacock), is far too young to remember that, but a whole lot of others here are not—I better be careful not to say too much now, or I will be reprimanded.

I took part in the last debate on the impact that Football Index has had on all our constituents, including mine—I will not mention their names, but I will refer to them. It is really good to be back here to discuss what lessons we have learned and what has changed. That was the question posed by the hon. Member for Blaydon: what has changed? Hopefully, the Minister can reassure us in his response.

The collapse of Football Index was detrimental to so many people, and some were undoubtedly financially ruined—I know someone who sadly was, although I am not able to put their name on record, but I have seen the detrimental effects. The situation has also highlighted the importance of being gambling aware. It is important that we get it right this time and the next time round. I was hoping that the hon. Member for Swansea East (Carolyn Harris) would be here, because she has been such a stalwart at the forefront of gambling issues. I admire her greatly, and she has taken up the subject in this House with real enthusiasm in order to make changes.

What is our football knowledge really worth? In football’s first stock market, people had fantastic prospects of making money based on how well they knew football. I know a whole lot about Leicester City, having been a loyal supporter since 1969, when I was a wee boy at school. That was not yesterday, by the way—it ages me greatly when people do the figures. The point I am making is that, although I do not know all about football, I love it. Most people here in this debate probably love football, but they may not know all the ins and outs of the subject matter before them.

The financial losses from this collapse have been absolutely devastating. I have read some absolute horror stories from people in my constituency and further afield. Some have lost hundreds of thousands of pounds that were invested in open bets on football players and their performance. It is also my understanding that the company folded with £124.5 million in remaining open bets—wow! Isn’t that truly extortionate? It shows the magnitude of what we have before us today and why this debate is so important.

Some 67% of people in Northern Ireland have been said to gamble, and they cover a range of ages, sports and other means. My hon. Friend the Member for East Londonderry (Mr Campbell) referred to all the other sports and the implications for them as well. Individuals must be aware of their gambling habits and the potential dangers that come along with gambling. Reports have suggested necessary recommendations for any similar scheme in future.

One point that we must get right is ensuring that any gambling company offering long-term bets will be able to cover payments to customers. That is to be covered by the Government’s forthcoming gambling White Paper. I look forward to hearing what the Minister has to say about the White Paper and how it will address some of the issues we have before us today. If it does not—with respect, Minister—we will need to see how it can be strengthened and enforced.

Others will make contributions. I am not sure whether the hon. Member for Inverclyde (Ronnie Cowan) is going to speak, but he has great knowledge of this subject. I hope he will intervene at some stage to give us some of his wisdom on the matter. I mean that honestly because he has a particular grasp of the situation.

[Ronnie Cowan (Inverclyde) (SNP)]

The issue is that when it comes to gambling products, we understand that there are rules and regulations in place. They are not to my liking, but they are there. This scheme and the successor schemes are designed to work in the grey areas—the dark shadows—of gambling. The Financial Conduct Authority did not even know whether it was responsible for them.

Hopefully, down the line somebody will be able to hold these companies to account. Their will is not to create an exciting thing for football fans to get more involved with and enjoy a game of football; their will is to take money out of people’s pockets. We know plenty of gambling products that are already doing that. I am not sure there is much in the White Paper at all that touches on FI. There has to be something that ensures the regulations are clear and understandable. It must also stop KiX: if KiX is up and running, plenty of other organisations behind it will be waiting to do exactly the same thing, and all they will do is extract money from punters’ pockets.

[Jim Shannon]

I thank the hon. Gentleman for that intervention. He has posed a few questions that are pertinent to the debate. I look forward to the contributions from the SNP spokesperson, the hon. Member for North Ayrshire and Arran (Patricia Gibson), and the shadow Minister, the hon. Member for Barnsley East (Stephanie Peacock), and the questions they will pose in turn to the Minister.

We need to see a sea change that does away with the grey areas that the hon. Member for Inverclyde referred to and the uncertainty, where people can get sucked into the process. Ensuring that customers can get their money back is of major importance. Early day motion 697 was tabled on 25 November 2021. I am pretty sure the hon. Member for Blaydon was instrumental in tabling the EDM and ensuring that others signed it. I signed the EDM to show support and to urge the Government to do more to ensure that those owed money receive a full reimbursement.

As I have stated before, gambling is a personal choice. I am not here to tell anybody what they should or should not do; I will always try to give people choice if I can. At the same time, sometimes Government have to encourage people to be more aware of what the choices are. As the hon. Member for Inverclyde said, there are clearly occasions when that does not happen, and that is why it is important to have a system in place. While gambling is a personal choice, we hope that those choosing to do so are educated about the potential risks. The losses can be huge. I read one story—I thought about it long and hard—about a young man, probably in his early 20s, who lost £165,000: my goodness! He lost what he did not have. He found himself in all sorts of problems, and he stated that it completely turned his life upside down. How could it not, given that he lost that amount of money at an early stage in life?

Many have openly referred to the shame they feel and how such things have affected how they look at gambling. There is absolutely no doubt that the Financial Conduct Authority should have regulated Football Index, and there are still questions to be answered. I know this may not be the Minister’s responsibility, but I would really like to know what discussions have taken place with the Financial Conduct Authority and what it is doing to regulate the situation. There are still questions to be answered.

Although it is argued that FI was seen as an investment, not gambling, its business model still relied on money from constituents and it was undoubtedly fundamentally flawed, as some of my constituents are able to confirm. Many people state that they feel let down by the regulators and that more should have been done to ensure the system was working correctly.

I will conclude because I am conscious that others want to speak. I look forward to hearing from the two shadow spokespeople, the hon. Members for Barnsley East and for North Ayrshire and Arran, and the Minister. Consumer protection must be at the heart of the lessons learned. The FCA’s consistent view has been that all the products fell within its regulatory perimeter up until the collapse in March ’21. Evidentially, that is no longer the case, and therefore we need a legislative change and reassurance.

Legislatively, it is always better to put these things in black and white. I hope action is taken to support those who suffered losses as a result of the collapse. I urge the Minister and our Government to ensure that victims do not wait years for reimbursement. That would be unfair, and we have a chance today to urge the Minister to grasp that. I commend the hon. Member for Blaydon for bringing forward this issue; there is no one in the Chamber who does not think she has done exceptionally well.